McArdle vs. National Health Care

by John Holbo on August 12, 2009

Discussion is perking along in my McArdle on rationing thread. For the record: she articulates her general case against national health care here, then follows up here. I think it all adds up to a nice illustration of the point I was making in this post (I wish I had made it more clearly, to judge from comments.) McArdle’s opposition to national healthcare is based entirely on slippery slope arguments, arguments from unintended consequences, and suspicions that those who are proposing national health care really want different things than they say they do. Now, this is reasonable. But only up to a point. Because at some point we need something more, but McArdle is quite strident in her insistence that what she has said is enough.

What does she leave out? Arguing only in the ways she does leaves it unclear what she would think about national health care reform if it worked. And the reason it is important to know that is that we really have to know what McArdle’s values really are – her ideals. Let me show how it goes.

Suppose (just suppose) we got a national health care guarantee (public option) that covered preventative care, standard procedures – even some quite expensive ones; but doesn’t cover experimental treatment or triple-bypass surgery for 99-year olds. Suppose the idea behind the program (for thought-experiment purposes) is that we will let the private market take up some slack, between minimal coverage and maximum. Optimal coverage is probably somewhere between but we won’t presume that the government knows best exactly where it is; and, honestly, it’s somewhat variable between individuals with different taste for risk. We low-ball the public option, reasoning as follows: no one sane would want less than a modest safety net, so we are doing the best we can not to force people to buy something they might not want. Sane people might well want more. So we let them top up on the private market, if they can afford it. Reason being: why the hell would anyone want to make it illegal for someone to spend their own money on something experimental or expensive, if they want? (Or make a side bet with an insurance company that they’ll need triple-bypass surgery at the age of 99. If that’s the sort of bet that inspires their gambling spirit.) Also reason being: the government can sort of eye-ball what the private sector gets up to and adjust its own minimum coverage accordingly. If there is something that everyone clearly wants to the point of being mostly willing to pay for – as shown by the success of insurance companies – either try to include it; or, if the private sector really is doing a good job of meeting this demand, let the private sector keep on keeping on.

In sum, you provide a public minimum by way of meeting basic demands for justice (care of one’s fellow citizens). And you do your best to let people make individual choices, in areas where they plausible might like to (do I buy the premium or settle for the minimum or somewhere in between?) which is good in itself, and a means to a further good end: harnessing the power of the market to signal important information about what works and doesn’t, what is wanted (as expressed by private individuals willing to pay for it.) So this is our social democratic utopia: a mixed public-private affair.

Now, before we get the the practical question of whether we can get there from here – and setting aside the question of whether some people would think this minimum wasn’t nearly enough – are the ideals expressed by the little toy set-up BAD? Is it a bad plan, even ideally? If so, why?

[UPDATE: before anyone makes the objection that this is nothing like the sausages actually being stuffed in committees, let me say: I know that. The point of this thought-experiment is just to clarify a plausible balance of values. The overall point is that there is not much point arguing about whether this is or that sausage is good enough, or not, or slightly better than that sausage, if you don’t even know what you want.]

I’m honestly not sure what McArdle will say. Either yes – the set-up is just bad in principle. Or no – the set up is not bad in principle, it just would be in practice. Let’s take these in order.

McArdle says yes. Yes, she doesn’t think this would work.Yes, it would have bad unintended consequences or be hijacked by extremists and self-serving bureaucrats. But that’s only objection 1, and it’s only a secondary objection. The main objection is that, yes, even if it worked more or less as advertised, it would still be bad because it’s nationalized health care and the government really just shouldn’t be involved in private health care decisions. Period. As a matter of principle. To have even the minimum of public health care foisted on private individuals, possibly against their wishes and principles, is an intolerable restriction on negative freedom and a clear case of an actor, the state, with no proper business doing a certain sort of thing, doing that very thing on a large scale. The bad of all these in-principle violations swamps any good consequences. In fact, we aren’t counting consequences. However that whole cost-benefit analysis rattles out, it’s a sideshow. (We think the costs would be high but, honestly, we don’t care. We aren’t utilitarians about this question.)

Possibly McArdle would say no. That is: if it worked moderately well, that would be great – or at least fine. But it just won’t. If this is her answer, then her objections are purely practical and utilitarian. (Not that she has no non-utilitarian principles, but at the level of principle, she has nothing against what is proposed.) But then her objection style is totally insufficient. She writes:

When I wrote the other week about why I am opposed to national health care, a number of people angrily demanded to know why I was writing about something that “no one is proposing”. Now, this is clearly a lunatic statement. I was writing about something that many people were proposing. I just wasn’t writing about the nebulous bills currently wending their way through various committees.

No, it’s not a lunatic statement. To say it all again: McArdle is right that it is reasonable to worry about slippery slopes, the bureaucratic mind, and unintended consequences. But it is not at all reasonable loftily to ignore what is actually being proposed, or to refuse to be the least bit imaginative and charitable about how it might work (as opposed to fail). Let me say that again, because it’s very important: McArdle would be justly disdainful of any reform proponent who simply refused to consider the risk of unintended consequences. But reformer are just as right to be disdainful of any opponent who simply refuses to consider the benefits of intended consequences. Most actual policy results are a mix that way, after all. You have to consider both, but McArdle isn’t willing (so far as I can tell).

Another angle: if your objection is purely practical, you cannot in good intellectual conscience just abstract away from all the actually existing practicalities into a kind of public choice theory Platonic Heaven of ideal tendencies for things to go wrong. ‘Hey look, a proposal to reform health care.’ ‘If that were a real proposal, some bureaucrat would have sabotaged it by now.’ That’s just not a sane way to think, on the assumption that you grant a certain sort of ideal reform direction would be, in principle, good. (If you admit that something would be good, but show no interest whatsoever in any possible ways of approximating to it, even in a limited way, that suggests that you don’t really think it’s good at all.)

To put it yet another way: if your objection is purely practical, if it really all comes down to utilitarian weighing of pros and cons, it makes no sense to refuse, in principle – and in the loftiest tones – to weigh anything but the cons, and only in an idealized ‘probably there are cons that look sort of like this’ way. Weighing the cons is necessary but not sufficient to conducting a fair weighing of the pros and cons. (This really ought to be obvious.)

Which makes me suspect that McArdle is really just opposed in principle. She hates the camel’s nose just as much as the whole camel that might follow. From which it follows that her objection to the camel’s nose – namely that it’s attached to the camel – isn’t her actual objection. From which it follows that she doesn’t actually have an argument against the camel getting its nose in the tent.

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A lot of times, the vibe I get from McArdle when she doesn’t want to argue specifics is, “If I argued specifics, I’d have to do a lot of work explaining away the areas where the data seems to go against my libertarian principles; but since I know libertarianism is true, that would be a waste of my time.”

I may be being dim here, but my understanding is that McArdle’s objections are abstract and concrete simultaneously: the principle is that any government program will inevitably be, in practice, a disaster.

And it’s a shade unfair to attack someone for remaining aloof from the specifics with an argument that starts with supposing the possibility of a program free of such things … Without adducing any evidence of its existence or argument for its plausibility.

“the principle is that any government program will inevitably be, in practice, a disaster.”

Well, if that’s the principle then it’s indeed highly abstract and concrete (as you say) in the sense that it runs full speed into a concrete wall of fail. (I give McArdle a little more credit than just that, wrong though I think she is.)

“And it’s a shade unfair to attack someone for remaining aloof from the specifics with an argument that starts with supposing the possibility of a program free of such things”

No, it’s not unfair in the least (pardon me for pointing this out, but it’s true): I’m not proving anything about the specifics of health care, so there’s no danger that my toy proposal will fail to match the complexities. I’m proving that McArdle can’t possibly be making a good argument against healthcare. That’s a bit different, and my abstract argument is sufficient unto the purpose.

Here’s the executive summary: if the disagreement really comes down to practicalities of proposed reforms then ‘this sort of thing will tend to go wrong in certain ways’ (which is all she is saying) cannot be a sufficient argument. It’s manifestly too weak for that.

I do not understand the objection to a national health care plan on libertarian grounds. We presently have a system administrated by a bureaucracy, abet a corporate bureaucracy. The system rations health care on the ability to pay. It it supported by a tax exemption. We know the free market does not work for health care. If I am sick and have the money I will pay whatever the supplier will demand for treatment and I do not have the knowledge as to what I need, much less what it should cost. The supplier has a monopoly over the product granted by the government. Doctors and hospitals are licensed by the government. They also granted the power to control the charges for their services. It looks like the argument that a wolf would make that sheep should be allowed to roam free without any protection.

If it were true that McArdle’s position is “the principle is that any government program will inevitably be, in practice, a disaster,” this is a testable hypothesis: is it true that all government programs are, in practice, a disaster? And it is easily refutable–there are quite a few government programs (of the health variety and other) that are not disasters (unless, of course, you define “disaster” as “not everyone gets a pony” in which case Megan has proven her point). Given that this hypothesis is so easily refutable, either Megan lives in a delusional fantasy, is intentionally trying to mislead her readers, or is taking a different position. Which one is your pick.

“it’s nationalized health care and the government really just shouldn’t be involved in private health care decisions”

In one of those McArdle pieces, she says that at one time in her life she was uninsured & suffered from a long-term health condition, and at that time she was “even more militant” against gummint involvement in healthcare. Anyone prepared to sacrifice their own health to their politics is out of the discussion, as far as I’m concerned.

“No, not the government lifebelt! Somebody else throw me a lifebelt! I’ll pay you later!

the principle is that any government program will inevitably be, in practice, a disaster

I think a slightly finer formulation would be something like “any large and complicated government program will inevitably be a disaster.” Bureaucracy tends to grow, the focus will be lost, etc. A private enterprise would go bankrupt, but a government program, decayed, deteriorated beyond recognition, will just keep going, like a zombie. That’s the argument, I think.

John, I would say that “better two steps away from Teh Evil than one step” is a fair argument to make for McArdle, especially if there really are a lot of people who do not agree with her about the evilness of Teh Evil.

So that gives her in my opinion a reasonable argument: she doesn’t think the current proposals will do much good for the money (because of the Gubmint etc), and she thinks it’s will ease the way to something she consideres clearly bad.

Without the second part of the argument, she would have to claim that the current proposals will do clear harm. But with the second part, she can say that even with small positive net effects, the risk of Evil Soc1alism later on is enough to oppose the current plans.

Surely practical objections to all options for a national health care system are implicit failures as well – it ignores reality. You could have issues with given proposals, or parts of them, but you can’t dismiss government running healthcare in all cases as there are dozens of examples of it being successful at least to the point where the differences between outcomes are statisically negligible (and some government systems broadly seem better than the US system), whilst being about half the cost.

Unless you have health insurance better than an HMO, I think any government healthcare system is better than the US. Even the NHS, underfunded and hampered by consultant’s stranglehold over the system, seems better than what the majority of Americans get. If you factor in that we don’t have to worry about what happens to our coverage if we lose our jobs, or get a complicated medical problem, it seems vastly preferable (I still remember my bemusement when my father in law asked how long my health care coverage would last after I lost my job).

The comparison I always find myself making is that my own, friends and family’s experiences of the NHS are mostly positive, and the negatives are generally waiting longer than you’d like for non-critical stuff like physio (couple of months, unless you have private insurance, which as various people have pointed out is very cheap). The NHS has problems, but its hard to imagine them being improved if it was privatised, particularly given the example of our privatised trains, water utilities, etc.

Whereas I’ve known plenty of people over the years from the US whose personal, or familial, experiences of the American system have been pretty bad to terminal.

It’s surreal that there is a debate on this in the US – probably a sign of how bad the US education system has to be to allow people that suffer the most from the present system be brainwashed in opposing it.

But Henri has it right: I hope the plans take into account the risk of creating a dinosaur because it is a clear risk. There are solutions, some public systems perform much better than others, but there are clearly risks. One would do well to consider them regardless of the insistence of those opposing making bad points over & over again.

(& I think it’s a dodgy idea to keep private insurance, a public insurance should crowd out the private ones at least at the level of basic healthcare. The public system should have the best treatments (although it might have regular treatments at a disconvenience of waiting lists).

When I lived in Spain (which has a system close to that of the NHS), my employer gave me the private top-up locally. The only use it wound up serving was the avoidance of the assigned GP – without going to the popular alternative of crowding emergency rooms – for simple things, and for simple prescriptions.

McArdle’s opposition to national healthcare is based entirely on slippery slope arguments, arguments from unintended consequences, and suspicions that those who are proposing national health care really want different things than they say they do.

I wish people would stop using water utilities as an example of privatisation = bad. On every metric, English water & sewage efficiency and cost-effectiveness improved after privatisation. This was clear for a good 10 years through benchmarking against Scotland, where there was no privatisation, the system remained very similar to the old English one and performance was worse on all measures.

Interestingly, the system in Scotland was reformed about four years ago: while remaining publicly owned, the various water boards were merged into one company the size of the English companies, had a complete management restructuring, and were held to a much stricter regulatory regime. Since then, performance has improved to and even beyond English levels.

That’s an interesting counter to McArdle types who think ‘public is always worse’ – but it’s not a devastating indictment of the failure of privatisation as a means of water supply in developed countries.

John H., what if one substituted “Iraq War” for “health care reform” in your above argument? Would it seem as reasonable to be solicitous of the upside possibilities and not focus so heavily on what might go wrong? McArdle was, of course, quite wrong in her assessment of the likely success of that war, and perhaps that humiliation is coloring her present perceptions.

Not really. It was bad until they were properly and effectively regulated. Then it greatly improved. The system was bad before because the treasury used to raid their coffers, and they were not allowed to independently borrow for capital investment. It would have been possible to change the rules on this, but for the ideology du jour. What you have today is in all but name a public system that is implemented by private companies. Its not the worst system, but its hardly the most efficient either. And there were easier ways to get to where we are today.

I’m continually stunned why intelligent and intellectually honest people take McArdle seriously enought to construct reformed rebuttals of her work. She is quite obviously a hack whose only skill is concern trolling. If she was an honest person, she wouldn’t have the career she has at the Atlantic. Paying attention to her lowers the high standards of this blog–didn’t you guys just host a syposium on “What are Intellectuals Good For?” Whats next? A symposium on “What are Trolls Good For”?

Thing about McArdle is that every time she says “my analysis”, its a lie. On the few occasions she’s been foolish enough to quote numbers, it turns out that she has the math skills of a 5th grader and absolutely no clue what’s really going on in the health (or any other) market. When she decided that an individual policy should cost $350 in 2009 because she paid $400 for a group in 2002, and then defended that by claiming that NY had inflation 16x everybody else it was about the 500th time that anyone who wandered in thinking they were looking at something real got the shock treatment of realizing that they were actually dealing with a dumb punk who’d learned a few big words but couldn’t count to 20.

Tom, the two decisions aren’t at all similar. Taking the decision to violate international law, and another country’s sovereignty, disregard world opinion and launch an aggressive war requires a very high degree of caution, in part because it is widely regarded as a very serious crime for whose consequences its perpetrators will be held responsible to a very high degree even if they were not intended or foreseen. Deciding to reform your country’s health care system doesn’t involve committing any crime, violating anyone’s sovereignty or rights, wouldn’t outrage world opinion and so doesn’t carry the same level of moral responsibility for possible negative consequences or require the same degree of caution about them.

“Which makes me suspect that McArdle is really just opposed in principle. She hates the camel’s nose just as much as the whole camel that might follow. From which it follows that her objection to the camel’s nose – namely that it’s attached to the camel – isn’t her actual objection. From which it follows that she doesn’t actually have an argument against the camel getting its nose in the tent.”

By now McArdle’s market niche is very clear. She took the basic role of blithe glibertarian, and throws some allegedly MBA-Chicago School (‘Nobel Laureates!) Econ analyses on it. Those analyses tend to be easily punked by random people on the internet, which is pretty bad for somebody from one of the more elite quant MBA programs in the frikkin’ entire world. One might think that she just makes sh*t up :)

In the end, she’s nothing but a right-wing propagandist, no better than a Ben Stein or a Greg Mankiw or a George Will (or Broder, Krauthammer, Brooks, Cohen, Kristoff, etc. ad nauseum).

Judging from the hacks above, she’ll be around for several decades (barring a shift to the left). The newspapers and magazines are full of columnists who have been full of it for decades. They like them. Megan is clearly in their target hiring demographic, and is being groomed by the Atlantic and The Economist as a professional right-wing BS-artist. This means that we should bear in mind her record, and that we should keep harping on it.

I disagree with John’s contention that Megan’s all-slippery-slope approach is reasonable, even “up to a point.” Every one of Megan’s arguments is predicated on the contention that reform will lead to the effective disappearance of private health care, and complete government dominance of both the health insurance and health care markets. That’s what she means by the “camel’s nose”. The problem is this: countries that have the Bismarck model of universal coverage through regulated private health insurance do not move to single-payer government-controlled systems. Germany started the first Bismarck-style system 126 years ago. It still has it. France, the Netherlands, Switzerland — they all started with regulated private insurance backed by a public plan for the needy, and they all still have regulated private insurance backed by a public plan for the needy. Except for the Netherlands. They used to have a public plan for the needy, but in 2006 they scrapped it and moved to an all-private health insurance system, with subsidies for those who can’t afford private coverage. What they have, roughly and leaving some bits out for simplicity’s sake, is what the US would have if it passed the current House bill, then eliminated Medicare and Medicaid, and funded the system by handing out subsidies or vouchers so everyone can afford coverage. The direction that Megan envisions things “naturally” going is precisely the opposite of the way they actually went in the Netherlands over the past 20+ years.

The evidence shows that in the real world, there ain’t no slippery slope. There is, if anything, a sticky plane. And there ain’t no camel behind the camel’s nose. Ain’t even a nose, actually — that metaphor can’t even be tweaked to make it work. I mean, we already know that the health insurance systems in every other advanced economy work better than the US’s. But within the subset of those better systems that rely on private insurance, the evidence of a century-plus of experience is that they don’t eliminate private insurance. Let alone private health care providers. In the face of such overwhelming evidence, it is not “reasonable” for Megan to abstractly theorize that a Dutch or French system is really a stalking horse for a British system. If it were, the Dutch and the French would have the British system. They don’t. End of story. Refusing to talk about the real world and preferring to stick with discussions of theories that do not fit the real world is not “reasonable”, and it seems to me that this has to be the point of first engagement with what Megan is saying.

It’s a shame to see a beautiful mind wasting time on the trite utterances of Ms. McArdle. Her posts are a classic example of the selfish libertarian “but let me tell you what I think, untouched by actual facts” school.

#24 demonstrates quite clearly the entirety of what you (John Holbo) need to say: Slippery slope arguments need to be argued, not merely asserted.

To add to Matt Steinglass’s international perspective I add the intranational one: Medicare hasn’t engendered the Canada-ization of US health care. The Veterans Administration system of direct govt. service hasn’t engendered the NHS-ization of US hospitals.

Social security hasn’t grown and replaced private retirement savings markets. Neither has the US postal service obviated the market for UPS or FedEx, nor the gummit’s subsidy of public media wrought the destruction of corporate media.

Slippery slope arguments posit causation like any other claim. As in any other case, the slope must be established, not merely asserted.

McArdle and other pro-Corporate advocates get lazy about slippery slope arguments because they have emerged in an intellectual climate that is as biased toward capitalist ideology as it is unwilling to promote high standards of rhetorical integrity.

It occurs to me that McArdle’s objections do actually have a foundation in fact. A health care system run by the sort of people willing to educate, employ, and promote her would be a disaster. She’s spent her career in the company of kleptocrats, con artists, and other reprobates, building a position on the basis of useful glibness rather than competence at engaging in reality. Since that crowd has been influential in American governance all her life, there’s indeed good reason to fear what would happen if there’s changes in what the institutions do without a thorough purge of her patrons and their cohorts.

I agree with Mr. Steinglass that it’s unreasonable of her to think that a baseline public option would eliminate the demand for private healthcare. It comes down to something that is woven into the fabric of the American identity:

We hate paying for what we need, and love paying for what we don’t.

The first half of that statement ensures that the public healthcare option won’t rise to the level of eliminating the reasonability of the existence of a private upgrade to the public system. The second half ensures that there will be a demand for comprehensive care beyond necessity, and beyond the limits of the national option.

It is this very principle that is responsible for the success of the Mac (I’d be surprised if even 1/4 of the people who own high-end computers will ever use them within 50% of their ability. Lord knows I haven’t.), the rise of the luxury SUV (which is, itself, largely responsible for the death of the Big 3), private elementary schools that cost more than a state university per year, and bottled water.

It’s a bad case of this combined with the satisfaction of knowing that we’re affluent enough to afford things that go beyond the necessary.

Best Option: Listen to stostosto, Cian, Barry, and Downpuppy and devote this blog to discussing serious thought not abject hackery.

Second Best Option: If you are going to discuss McArdle’s abject hackery, treat it as such. No need for complicated theoretical dissections of her slippery-slope arguments when–as Matt Steinglass and b9n10nt point out–we have plenty of real-world evidence to suggest that they are simply baseless.

“it comes down to something that is woven into the fabric of the American identity:
We hate paying for what we need, and love paying for what we don’t.”

This is so true it is almost painful to read. Also, Americans often resent politicians who would try to get them to pay for what they need if it will even theoretically cut into their ability to buy much more of what they do not need.

Matt’s comment in 24 reinforces my statement of McArdle being dishonest – we have an alleged MBA from an elite school who’s talking about a program, but only uses those (very poorly done) international comparisions which make her point. Matt’s comment is striking – in many, many chances to do a certain thing, over decades, the only countries which have are those under communist governments (IOW, not a good comparison for US politics).

Ben has a very good point, I say, disinterestedly :)

The way that hacks, frauds BS artists and liars prosper in our society is because of undeserved respect. When one stops to think, it’s amazing just how many of the influential
people in the current right-wing movement are people who have spent many years, if not decades being publicly wrong, dishonest and corrupt (Limbaugh, Armey, the ex-HMO CEO head of FreedomWorks, all of Fox News, just about any AM talk show, Glenn Beck, the Jim Cramer, most right-wing televangelists).

Every time that we engage a proven dishonest person as if their arguments deserved respect, we help their lies live, and aid them in their careers.

And you do your best to let people make individual choices, in areas where they plausible might like to (do I buy the premium or settle for the minimum or somewhere in between?) which is good in itself, and a means to a further good end: harnessing the power of the market to signal important information about what works and doesn’t, what is wanted.”

That’s not what ANYONE is proposing. I think it’s reasonable to look at what the legislation has in it, and what the activists/lobbyists/regulators involved say would be a desirable goal–and if you are doing one or the other, that’s fine. (That’s what the quote from McArdle says–I’m looking at what people are saying is desirable, not what some particular draft legislation proposes.) But the President’s 8 points put the required coverage as being as good or better than the current premium products.

To put it differently: a proposal to cover everyone at a minimal level would be so entirely different than what’s currently being proposed by anyone–Congress, the President, activists, Republicans, Tea Partiers–as to make discussion of one irrelevant to the other.

From the second of those links, you’ll see – or rather won’t see – that the Hawking claim has been scissored from the editorial; it originally went after “the likelier you are to get care”. As you can hear if you listen to the audio, which hasn’t (yet) been re-recorded.

Equating the economics of health care with food, gas, and cigarettes should exclude McArdle from any reality-based discussion.

Libertarian arguments against publicly-funded health care are almost always offered by people who have no objection to government-run military programs or spy agencies operating without meaningful oversight. Can’t trust the feds to pay doctor bills but all for them having weapons of mass destruction. And, yes, I know that some libertarians oppose the existence of national military forces. They are called anarchists and don’t really figure in the current debate.

The problem with your argument is that your initial assumption is false. To paraphrase: assume a nationally run health care program/option would work. Federal programs have a very consistent record of being inefficient and expensive, especially when compared to the private sector. There is no evidence that the plan would actually work, unless you think that “well this time the program won’t be designed poorly” is evidence. So it is difficult to start from a fantastic assumption. However, even if the program would be designed better this time, there are better and more cost effective ways to give everyone access to coverage than creating a massive government program, such as by giving people tax credits. You can be for greater coverage without being for a government plan. For example, I am for everyone being able to eat every day but I am not for a government run grocery plan.

There is really no point in arguing about the specifics the plan because the disagreement comes down to some fundamental assumptions. Libertarians see that government programs overwhelmingly are inefficient, riddled with unintended consequences, and provide no incentives for improvement. Libertarians also think that the market acts a better check on corporate behavior than voters act as a check on political decisions. Liberals think that government programs can work as long as they are designed correctly, and in any event, politicians and government agencies act more in the public interest than a corporation would. That’s the 1 paragraph summary at any rate.

Among the countries shown, the US infant mortality rate is exceeded only in Russia, Mexico, Turkey, China, and Brazil. So much for the excellence of healthcare in America from the perspective of the average citizen.

This may come as a terrible cultural shock to many but credit for first implementing a national insurance scheme for healthcare goes not to Britain for creating the NHS in 1948 but to Count Otto von Bismarck, first Chancellor of the German Emprire.

“The Health Insurance bill . . was passed in 1883. The program was considered the least important from Bismarck’s point of view, and the least politically troublesome. The program was established to provide health care for the largest segment of the German workers. The health service was established on a local basis, with the cost divided between employers and the employed. The employers contributed 1/3rd, while the workers contributed 2/3rds . The minimum payments for medical treatment and Sick Pay for up to 13 weeks were legally fixed.”http://en.wikipedia.org/wiki/Otto_von_Bismarck

There is something that bothers me about the idea that McArdle simply has to take a stand on whether or not she likes an ideal version of the proposal.

Say you’re in the drawing room with your closest, most intellectually compatible friends for cigars after dinner. The question of separate-but-equal education comes up. Someone asks you to contemplate an idealized version of the policy, something which featured rigorous enforcement of equal per capita resources for both groups, while also working to take maximum advantage of the situation, say in the way that traditional women’s colleges or black universities have asserted their superior results at education. In this comfortable setting, talking theory among friends, you might be willing to concede the possible advantages of this idealized system.

Now say that a resurgent rightwing, seizing a moment of political power, starts mounting a serious campaign for a restoration of separate-but-equal. Their advocates start demanding that you take a position, a public position, on whether or not an idealized version of the policy would be a good thing. You would rightfully, and indignantly, refuse to take any such position, since the actual political dynamics of race in this country guarantee that no such idealized version is possible. And in the actual political situation, speculation about the virtues of an idealized version would serve no purpose but to strengthen the hand of those attempting to saddle the nation with something that is wrong and evil.

Libertarians, like McArdle, doubtless see themselves as being in the latter situation, and view a government provided health care guarantee just about the way I see mandatory separate-but-equal education. So although I am happy to criticize libertarians for being libertarians, and to argue the merits of slippery slope analysis, I don’t really expect McArdle to take a position on an idealized version of national health care. We’re not in the drawing room, we’re not talking theory, and we’re not all friends.

> Libertarians, like McArdle, doubtless see themselves
> as being in the latter situation, and view a government
> provided health care guarantee just about the way I see
> mandatory separate-but-equal education. So although I
> am happy to criticize libertarians for being libertarians,
> and to argue the merits of slippery slope analysis, I don’t
> really expect McArdle to take a position on an idealized
> version of national health care. We’re not in the drawing room,
> we’re not talking theory, and we’re not all friends.

Problem is that since 1980 libertarians have had no difficulty compartmentalizing their beliefs to justify voting for Republicans. It is only when they are faced with a Democratic administration with substantial political capital that they suddenly decide their philosophy is indivisible.

“The question of separate-but-equal education comes up. Someone asks you to contemplate an idealized version of the policy, something which featured rigorous enforcement of equal per capita resources for both groups, while also working to take maximum advantage of the situation, say in the way that traditional women’s colleges or black universities have asserted their superior results at education. In this comfortable setting, talking theory among friends, you might be willing to concede the possible advantages of this idealized system.”

We are talking about idealized MANDATORY total segregation of the races in public education? I have to say: I have no problem explaining why I am opposed to THAT in principle, idealize as much as you like. There are problems in practice boy howdee but there is a basic problem in principle. You are right that, possibly, not absolutely everything about the plan would be work out so terribly (in a sort of ‘Hitler was a vegetarian’ way: very few things are utterly rotten through and through). But at the level of principle, mandatory separate but equal racial education is a terrible idea. If Megan McArdle is as opposed in principle to national health care as I am in principle to mandating racism (or racialism) in the public education system, then that’s a pretty important to get clear about.

So, unless I’m missing your point, this is a confirmation of my point, not really a thought-provoking counter-example.

If you say you are just talking about federally permitting local political units to go the separate but equal route then the same point applies again, only in a slightly more complex way. If someone wants to have a private whites-only club or private school, no tax money asked for, that issue can actually get at least a bit ‘freedom of association’ complicated. But if someone wants to have a public whites-only school then I have no problem saying I find that unacceptably problematic in principle, not just in practice. Part of the problem here is that we need a more realistic picture of how it could come about that, in some corner of contemporary America, you could get some huge supermajority within the majority plus a supermajority within the minority to prefer this unattractive option, so that there could even be a practical question of overriding massive preferences for self-inflicted apartheid. Because if literally almost all the black and almost all the whites aren’t clamoring for it, the question of whether we should permit egalitarian apartheid doesn’t even get to the point of being almost interesting, at the level of principle.

If everyone on both sides WANTS total apartheid, then we need to ask what terrible catastrophe has, hypothetically, lately befallen us, such that this preference has taken root.

“Federal programs have a very consistent record of being inefficient and expensive, especially when compared to the private sector.”

How’s that analysis work (“efficiency”) for examples I set forth: Social Security, Medicare, VA, Postal Service?

It seems fairly clear that the “demand” that markets “see” and respond to is only that which is represented by aggregate individual’s purchasing power. By definition, those who are poor enough simply stop having any demand at all. To the market, those who are poor are actually free of needs and shielded from all worldly cares, whereas the rich are ever in a state of irritable deprivation.

A poor woman without money for winter heating has no “demand” for such services, whereas a rich woman has “demand” for a second winter home in a warm climate.

The relevance to Medicare, and health care in general, should be clear.

Libertarians, like McArdle, doubtless see themselves as being in the latter situation, and view a government provided health care guarantee just about the way I see mandatory separate-but-equal education.

I think everyone sees MANDATORY separate-but-equal education the same way you do. You might get the odd neo-nazi every now and then to take the Pro side, but since they don’t believe in public schools to begin with. . .

I’m not sure where this criticism comes from. Liberals are constantly being forced to address “idealized” versions of policies that are crappy in practice. The flat tax; affirmative action; school vouchers; you name it. Just look at spousal notice for abortions; pro-choice constantly are being asked why, in principle, it’s such a bad thing for the husband to have notice when his wife seeks an abortion. On the pundit circuit, do we get to point out all the practical reasons those rules are full of crap? Hell no.

Now that I think about it, there’s very few libertarian/conservative positions that are even defensible except at the idealized level, which is probably why the debates are always at that level.

McArdle’s opposition to national healthcare is based entirely on slippery slope arguments, arguments from unintended consequences, and suspicions that those who are proposing national health care really want different things than they say they do.

Why are unintended consequences not germaine to the discussion? Let’s say someone proposed raising the minimum wage to $20/hr. Sure, some poor folks are going to get a huge raise, but lots of other folks are going to lose their jobs. The legislators may not intend for a lot of people to lose their jobs, but it would happen nonetheless. Why isn’t that enough grounds on which to oppose a policy?

Josh, you need to understand that there is significant slippage between saying that something is germaine – that is potentially relevant: one valid consideration among many – and saying that it is the ONLY consideration. That is, it alone is necessarily a sufficient consideration to consider. My objection is that McArdle is making the same slip that you just made in your comment. My point is that it is quite a common slip. I think your comment is, therefore, a minor confirmation that I am right.

To put it another way (in light of your case): you are saying ‘let’s assume a case in which the unintended consequences actually are terrible’. Wouldn’t that be bad enough to make it a bad idea? Yes. But the assumption does all the work. Turn it around. ‘Let’s assume a case in which the unintended consequences are not terrible, are indeed fine.’ Would that be good enough to make it a good idea? Yes. Everything would then be eminently peachy. Does it follow that in the real world we can actually just ignore unintended consequences, tout court, because we have securely reasoned that if they aren’t so bad, that won’t be so bad? No, because in the real world we need to know WHETHER the unintended consequences are terrible or not so terrible. McArdle’s approach plows past this rather relevant fork in the road. As does your comment. It’s quite easy to do that, and it needs to be avoided.

Yes, and that would require going the extra mile to evaluate the WHETHER. It’s easy, I think, to quickly list all the various constraits, from personal and psychological to institutional and cultural, that keep this from happening with any regularity.

Well, perhaps in their minds the assumption of unintended consequences and bad faith on the part of government officials had crystallized to such a degree that it doesn’t require any validation. A government program = bad faith + unintended consequences = disaster.

This sounds dogmatic, but, as someone already mentioned above, people on the other side (including myself) do it too: “we should bomb country X to liberate the women there.” I certainly wouldn’t want to go thru the exercise of “what if the people who say this are sincere and it’ll work exactly as presented.” I know bullshit when I see it.

Now, I’m quite certain that I’m right and not too dogmatic and they are wrong and extremely dogmatic, but still, it’s hard to miss a certain symmetry here.

How’s that analysis work (“efficiency”) for examples I set forth: Social Security, Medicare, VA, Postal Service?

Really, those are your choices for efficient government programs? Last I checked Medicare and Social Security costs are projected to explode well beyond anyone’s ability to pay, the post office lost almost 3 BILLION dollars last year and is planning on cutting back service to save money, and the VA is infamous for the sorts of conditions (rat and insect infestations, mold, lack of heat or water) which were revealed at Walter Reed hospital last year.

“Now, I’m quite certain that I’m right and not too dogmatic and they are wrong and extremely dogmatic, but still, it’s hard to miss a certain symmetry here.”

But even this result is kinda useful in its way, Henri. If McArdle isn’t really arguing against health care reform proponents in the least but just writing them off as dangerous maniacs to the last man and woman, she should say so. ‘You are all so incompetent and crypto-vicious in your motives that you aren’t worth talking to, only worth fighting to stop.’ And then reformers could look into their hearts and see whether she seems right. If so, they’ve learned something about their own crypto-viciousness. If not, then at least it would be settled that McArdle has nothing to say to them at the policy level. (In short, she should stop pretending that she has lots of public choice theory-style arguments that those on the other side just haven’t thought through as clearly as she has.)

Sure, but not necessarily from her point of view. On the other side (that’s trying to launch some wicked initiative) there are three kinds of people: maniacs, cynical opportunists, and naive fools. You can’t do anything about the maniacs and cynical opportunists, but you can convert the fools. And to convert the fools… well, to convert the fools you say whatever is most likely to help convert the fools. It doesn’t matter how you do it, after all you’re on the side of the angels. Unless you’re a cynical opportunists, in which case it matters even less.

The ‘unintended consequences’ argument is why the NHS is a relevant comparison: even if we say that the NHS *is* less good than systems in Sweden, France, wherever, it’s equally clearly better than the present US system on nearly every metric (the exception is ‘how much time you get to spend nearly dead being constantly wracked with pain from taking hideous doses of chemotherapy that everyone knows won’t cure you’, thanks to the NHS’s Death Panels).

So even if state-provided healthcare were done *really quite badly*, then we’d still expect overall health outcomes in the US to improve…

The particular characteristic of the NHS is that it combines a social insurance scheme for personal healthcare costs with a verging on state monopoly provider of healthcare services. Healthcare systems in other west European countries have avoided that combination and concentrate instead on social insurance schemes. Whether by coincidence or not, in European comparisons the NHS comes out fairly well down the performance league table.

Whether by coincidence or not, in European comparisons the NHS comes out fairly well down the performance league table.

Which in fact is extremely impressive given the very low level of British health care expenditures compared to other OECD countries. This strongly suggests to me that direct state provision of services is in fact by far the most efficient arrangement, and that it would only take a modest increase in funding- still well short of the level of the most expensive European systems- to make NHS pretty much top of class. (Note that I am not necessarily suggesting that this would be a socially desirable allocation of funds given that health outcomes in Britain are already good; there may be better ways to spend money than producing a further incremental improvement in an already good health care performance.)

Its also impressive given how much power senior doctors have always had to structure the NHS to meet their needs rather than those of patients. Expenditure is only part of the problem in the UK. The other part is the rationing of medical education so as to produce an artificial shortage of doctors; and a rationing of senior doctors time (so that they can play golf, or do private work).

Unintended consequences are always relevant to any government program. It is nearly impossible to foresee all the effects of a rule or a system without seeing it in action. Especially when those rules run over 1000 pages in length. The point is that it does not make sense to create a huge system of rules which will come with unintended consequences when you can achieve the same objectives with other modifications of policy.

b9n10nt #48

Social Security, Medicare, VA, and the Postal Service are all examples of poorly run programs. When I look at them, I see unsustainable future spending in social security, an overly expensive and easily gamed Medicare program, a VA that cannot maintain its facilities, and a Postal Service that is losing money. I’ll note that even Pres. Obama noticed the Post Office’s shortcomings. Now, if you ignore the shortcomings of these programs, then I suppose they are pretty decent.

A poor woman does have demand for heat. It just might be priced at a level where her quantity demanded is zero. I agree that she should not freeze to death. But the way to help her is not by having government administer an energy provision system. The most appropriate way to help is by giving her money to buy heat. If you are worried about her spending the money on something else, then make it a tax credit.

TomB, you’re an ignoramus. Social Security is solvent for decades to come, and can be made solvent essentially forever with very minor tweaks such as eliminating the income cap on SS taxes. The VA delivers good-quality care with far greater efficiency than any other part of the US health care system. The Postal Service is not intended to be a profit-making business; it is obliged to provide money-losing services such as daily mail delivery in thinly-populated rural areas. Medicare is VASTLY more efficient (in terms of % of revenues spent on administrative costs as opposed to care) than private health insurance; its cost / sustainability problems are not of its own doing but are those of the system as a whole (precisely what health-care reform is supposed to address.)

One reason for the relatively high pay of physicians and medical school graduates is that the legacy situation in the NHS a decade ago was that the number of physicians per head of population was low compared with several other European countries – notably so compared with France – an outcome of the verging-on state monopoly in the supply of healthcare services in Britain. The cheapness of healthcare by the NHS was importantly because of the relatively poor pay for nurses and support staff – a situation again bolstered by the state monopoly.

It is reported that c. 70% of the extra money for the NHS since 1999 has gone on enhancing staff salaries. Also:

“The NHS has seen a year-on-year fall in productivity despite the billions of pounds of investment in the service, latest figures show. The data from the Office for National Statistics showed a fall of 2% a year from 2001 to 2005 across the UK.”http://news.bbc.co.uk/1/hi/health/7610103.stm

Probe a little and you’ll discover the huge extent to which the public debate on healthcare is myth-ridden. As an ancient and a personal beneficiary of NHS healthcare, I’ve a deep interest in a well-performing NHS but that shouldn’t be allowed to obscure issues concerning its structure, performance and its monopoly power over the market. The NHS was created at a time when state industry monopolies were highly fashionable in Britain and where “competition” was considered threatening. Governments in other west European countries didn’t start out with that mindset.

SS was started for security in old age, not as an income redistribution scheme. In fact politicians promised again and again that it would never become income redistribution in order to get the people claiming socialism to back off. And now you want to make it an income redistribution scheme. So forgive me for not trusting you or any politician when they say this program will never become what I fear it will.

Also, my parents paid for Medicare in every single paycheck for their adult lives. They didn’t like it, but they were forced to, and they damn well better get the benefits. Thus there’s no conflict between supporting the continuation of Medicare, a government program, and not wanting the government to be more involved in health care. It would be different if all that money had not been taken from my parents against their will for so many years, but it was and if you dissolve Medicare then you are stealing from them what they have already paid for.

“A poor woman does have demand for heat. It just might be priced at a level where her quantity demanded is zero. ” This would be sooo funny if not for the poor women actually existing.

But the solution proposed is clear: subsidize private companies into the charitable business of a providing ‘ a break for the poor’. It’s fantastic really, because their efficiency increases this way by reducing their demand for marketing (which is also a good thing because it makes marketing prices go up making it interesting to invest in marketing).

By reports, per capita UK spending on healthcare is now up to the European average.

That’s a less than illuminating way of putting it since the European average lumps the wealthy northern countries in with the much poorer southern and eastern ones. The UK is still comfortably at the bottom of the former league.

That’s a less than illuminating way of putting it since the European average lumps the wealthy northern countries in with the much poorer southern and eastern ones. The UK is still comfortably at the bottom of the former league.

I’m not sure it’s that obvious. From the WHO, it appears that the UK government spends only around 5% less than the Swedish and Swiss governments do on healthcare per capita, and only about 10 or 15% less than Norway, Denmark, and Holland (ironically it spends less than the US government does too).

Sadly, to my knowledge, the regular line that healthcare in America is awful for the sick poor has been a regular rationale for the NHS since the 1950s.

What’s sad about that? Healthcare in America *is* awful for the sick poor, so if the British want to use that as a reason not to trash what they’ve got, why shouldn’t they?

Unintended consequences are always relevant to any government program.

Or any other human action (or for that matter inaction) – they certainly aren’t a government monopoly. For example, rescission for minor mistakes is an unintended consequence of the current private insurance system. (At least I *hope* it’s unintended – how monstrous would it be as a conspiracy?)

But it’s true that government programs have unintended consequences – this discussion, for example, is ultimately an unintended consequence of a government research program to facilitate communication between universities, called “ARPAnet”.

It is nearly impossible to foresee all the effects of a rule or a system without seeing it in action.

True, but this seems like a very poor reason for inaction, especially when the status quo is provably at the low end of the range of achievable outcomes. Not all unintended consequences are negative and not all the ones that are negative are irreversible. Refusing to take any action because it *might* have an unforeseeable negative consequence is like refusing to leave your home because you might be hit by a car. It’s true; you might; but there are very good reasons to go on living regardless.

Sometimes it seems to me like the conservative attitude toward government is like Howard Hughes’s attitude toward human interaction: avoid it at all costs because of the worst things that could possibly happen, ignoring both the probability of those outcomes and any possible benefits.

I think that many people share the goal of ensuring that all people get some level of coverage. The difference is in the minimum level of coverage and how to get that coverage. I don’t think equality should be the goal – I think sufficiency for all should be the goal. I also think the best way is to give poor individuals the means to buy insurance and not to have the government do the providing. Some libertarians may not agree with me on the first point, but if sufficient coverage is a given, they would agree that putting the government in charge is not the best way to achieve coverage.

Practicalities are a perfectly valid reason for objecting to a plan even if you do not oppose the plan’s outcome. This is doubly true when there are plenty of alternatives.

#68, the solution is subsidize individuals, not companies.

#66, you are misinterpreting the evidence. But that is, partially, my point. Your underlying assumptions cause you to view the evidence differently from me. I don’t think you are unreasonable for thinking that the agencies work well. Just that you are unreasonable for thinking that they work so obviously well that any other view is garbage. To me and to many other people, those agencies function poorly.

The Post Office must go on money losing routes but it also must go on money making routes (e.g., intracity). The level of service you receive in the Post Office is also less than what most private businesses provide. To me, it seems that a privately run entity could do the same thing as the Post Office, but better and cheaper. I am not trying to persuade you that I am correct – only that the evidence is sufficient for me to reasonably have my view.

As for Medicare, some of the administrative expenses are absorbed by other government agencies (e.g., the IRS does revenue collection). More is spent per patient by Medicare as older and sicker people need more care, which reduces the ratio of revenue to administrative expenditures (assuming administrative expenses have a per patient component). And Medicare is wrought with fraud, so perhaps spending more on administration could help reduce this. Administrative costs are not necessarily wasted costs. Otherwise, nearly all government expenditures would be wasted because governments mostly administrate.

No., you are talking ideologically warped rubbish and far-fetched special pleading (your attempts to downplay the administrative efficiency of Medicare are transparently ridiculous, and are well-known right-wing talking points- you’ll never hear them defended by reputable health care economists), whereas I stated easily verifiable facts. (I note with interest that you carefully avoided your outright lie about Social Security in your response.)

And Medicare is wrought with fraud

You meant “rife”. Which, first of all, is unclear- private insurance companies also have a fraud problem and there really are not the data to estimate its size relative to Medicare’s. Second, most of the fraud is committed by PROVIDERS, not patients, so you’re actually making an argument for British-style socialized medicine!

So sorry that the real world just doesn’t conform to libertarian fantasies. How frustrating that must be for you.

Not really, because I was comparing government spending per capita on healthcare while you are comparing (total, i.e. private + public) health expenditure as a percentage of GDP. It’s all on the WHO website if you care to look.

I am not saying we should do nothing about health care. Only that it does not make sense to create a complicated system with more risk of unintended consequences when a simpler system could have similar results and be easier to adjust to avoid unintended results. To use your analogy, I am not saying we should stay inside; only that we should not take the route that is 15 miles long when there are other routes that are only a few miles long. Also, I agree that unintended consequences apply to private as well as government actions.

Rather than compare the U.S. to Europe, why not compare the health systems among the states? Does health care in Massachusetts or New York cost less or produce better outcomes than that in Minnesota or Texas?

I did mean “rife,” thank you. I also did not address the VA. Unintended consequences can be used to oppose conservative or libertarian ideas as well. A lack of regulation can lead not just to increased competition, but also to unfair results like people being denied care for failing to comply with a minor formality. I do not like those consequences either.

Social Security is solvent for decades to come, and can be made solvent essentially forever with very minor tweaks such as eliminating the income cap on SS taxes.
This is far from clear. It could also be solved by doubling the SS tax rate. Just because something is a solution does not mean it is a good solution.

The VA delivers good-quality care with far greater efficiency than any other part of the US health care system.
The VA may deliver good quality care. This does not mean that we can afford to everyone that same quality of care. Nor does it mean that the VA system is scalable to the nation as a whole.

The Postal Service is not intended to be a profit-making business; it is obliged to provide money-losing services such as daily mail delivery in thinly-populated rural areas.
This says nothing about its efficiency and nothing about whether it performs better than a private enterprise.

Medicare is VASTLY more efficient (in terms of % of revenues spent on administrative costs as opposed to care) than private health insurance
Well yes, in terms of % revenues spent on admin costs. But what does this tell us? Nothing. It is a facile analysis that lacks useful information. The world is more nuanced than you think it is. Calling something “ideologically warped rubbish” is not a counterargument, and it does not tell anyone what specifically you think is false.

Patients are often complicit in Medicare fraud. It is not just the providers acting alone.

“The level of service you receive in the Post Office is also less than what most private businesses provide. To me, it seems that a privately run entity could do the same thing as the Post Office, but better and cheaper.”

Horsehockey, Tom – you clearly don’t do much shipping of packages or you’d know what load of rubbish that is. wown a small business in Dallas that ships several packages to New York and Connecticut every week. Two-day delivery of a 2-pound package via Priority Mail costs about $5. Two-day delivery rates for FedEx runs about $18, while UPS charges slightly over $20. In fact, 2-day delivery via Priority Mail is about half the cost of 4-day delivery by UPS. If the private shipping services are so much more efficient that the Post Office, why are their rates 3-4 times higher for the same service?

The VA may deliver good quality care. This does not mean that we can afford to everyone that same quality of care. Nor does it mean that the VA system is scalable to the nation as a whole.

But that’s silly. Like saying “water is wet, but that does not mean that water could wet an area as large as the Atlantic Ocean”.

The VA is not only high quality, it’s also relatively cheap on a per patient basis.

And while there are obviously huge political obstacles, are you actually proposing any technical reason that VA-like care couldn’t be scaled up to cover the whole country? Is there some reason the system works well with a few hundred thousand, but magically fails at the 5 million mark, or the 20 million mark, or the 200 million mark? Something very similar seems to work fine at full-scale in the UK, after all.

It seems rather extraordinary to claim that the system couldn’t scale. So that claim should require extraordinary evidence, not vague hand waving about unintended consequences.

Barry- and that’s of course just a subset of the larger game, whereby which they run every government agency into the ground whenever they’re in power, thus demonstrating the “truth” of their claim that government is inherently incompetent. (Strangely, though, few of them are willing to extend that point of view to the military, which is oddly exempt from the opprobrium normally due a “government program” just as its cost is mysteriously not subject to any normal fiscal calculus.)

Steve LaBonne has already done the heavy lifting, but I’ll tie up one remaining loose end: the statement “the VA is infamous for the sorts of conditions (rat and insect infestations, mold, lack of heat or water) which were revealed at Walter Reed hospital last year” is, of course, nonsense. The Walter Reed Army Medical Center is not operated by the Veterans Administration.

In any event, you might imagine that the revealed preferences of veterans who avail themselves of the VA’s services (for which they typically have to jump through major hoops to establish eligibility, by the way) might count for something in the minds of glibertarian critics. If the government-run VA is such a nightmare, where are the masses of VA patients voting with their feet to move to the private sector?

“To put it yet another way: if your objection is purely practical, if it really all comes down to utilitarian weighing of pros and cons, it makes no sense to refuse, in principle – and in the loftiest tones – to weigh anything but the cons, and only in an idealized ‘probably there are cons that look sort of like this’ way. Weighing the cons is necessary but not sufficient to conducting a fair weighing of the pros and cons. (This really ought to be obvious.)”

“Here’s the executive summary: if the disagreement really comes down to practicalities of proposed reforms then ‘this sort of thing will tend to go wrong in certain ways’ (which is all she is saying) cannot be a sufficient argument. It’s manifestly too weak for that.”

I am still a little confused your argument still seems a bit muddy to me.

Hmmm. The debate between the ideals of the government provisioning a good or service and the private sector provisioning a good or service is pretty old one. Right? Does she really need to re-hash the abstract pros and cons of say the price calculation portion of that debate? I realize that it might to be true for Crooked Timber commentators but for the vast majority of folks that is a settled matter.

She is being generous by not re-hashing that debate. [Actually she does occasionally, probably not enough, I enjoyed her post pointing out that current rationales, for govt provisioned health care, regarding marketing and economies of scale really aren’t any different from the arguments for govt provisioned everything. I wish I could find it.]

Ok so the best argument for your ideal is that it works in Europe. Does she really need to explicitally keep mentioning that over and over again?

I mean agree with it or not she is pretty clear about why she thinks that ideal would not work here and it is pretty implicit that she is acknowledging that your ideal works in Europe.

Without the US price feedback would no longer exist and your ideal wouldn’t work here or in Europe anymore.

Ok, so what pro arguments do you think she is leaving out? What arguments do you think she is leaving out that if included would constitute a fair weighing of the pros and cons?

#68One reason for the relatively high pay of physicians and medical school graduates is that the legacy situation in the NHS a decade ago was that the number of physicians per head of population was low compared with several other European countries … an outcome of the verging-on state monopoly in the supply of healthcare services in Britain.

No it wasn’t, it was because the medical profession controlled the training of doctors, and thus limited the number of places available. This was a legacy from one of the compromises made to found the NHS.

The cheapness of healthcare by the NHS was importantly because of the relatively poor pay for nurses and support staff – a situation again bolstered by the state monopoly.

Nurses and orderlies were underpaid because Thatcher slashed public salaries generally. Blaming the NHS for this situation would be perverse. To extend the point, many of the problems of the NHS from the 80s onwards were a legacy of Thatcher’s ideological hostility towards both the NHS and the public sector in general, which resulted in huge underfunding.

The NHS was created at a time when state industry monopolies were highly fashionable in Britain and where “competition” was considered threatening.

Hardly. Prior to the founding of the NHS the British model of healthcare was broken. Most people had very limited access to healthcare at best. The NHS had to build much of our medical infrastructure from scratch. The idea that in the post war the private sector had the capital to somehow build the necessary infrastructure is laughable.
You work with what you have. If you have a working private health sector, then simply changing the funding model is probably the way to go. If you don’t have a working private sector and need a functional health service fairly quickly, then you need to build it yourself.

Productivity figures in the NHS are more of an art form, than a science, incidentally. Nobody can agree on what should be measured, and they’re distorted by the fairly large (and deserved) pay rises given to nurses/orderlies etc.

And finally whatever the flaws of the NHS (and I agree with DSquared incidentally), it is what we have. The idea that we could somehow move easily to a French, or German, style healthcare system is a fantasy. Just as the idea that the US could end up with anything other than socialised insurance.

The arguments that SS is a failed program are projections of what “might” (and probably won’t) happen. SS has shifted poverty so dramatically that the very young are now more likely to be poor than the very old. The Civil courts (where you get your contracts enforced) are a fine example of a mixed private/public system. Lastly it is entirely impossible to imagine the US way of life without those nasty, nasty public roads. Do you think Walmart could exist without the interstate system? Between a private monopoly and a public monopoly I prefer a public monopoly. I can vote their boss out of office and I can limit their pay unreasonably as a matter of law and I can get the state to investigate corruption. Private monopoly, no such luck.

and the VA is infamous for the sorts of conditions (rat and insect infestations, mold, lack of heat or water) which were revealed at Walter Reed hospital last year.

That’s a libertarian fable. Walter Reed is an Army facility, not a VA one, and is perhaps a useful example of how socialized medicine doesn’t work when the Army runs it. The VA has been, by any reasonable reckoning, a success in providing healthcare. For that matter, Walter Reed patients could always move over to the superior private system, if such a system existed.

M. Mouse @ 2 is right, as can be seen from M. McArdle’s most recent post. She apparently believes a government run plan will necessary be run according to different principles than a private plan; people will think differently once they know they’re working for the the big G and not for a Randroid free enterprising, free spending business leader. There will be nasty politics, and decisions will be made for reasons other than economic principle. I don’t know how representative this is–I assume she intends it to be representative of mainstream economic consensus thought such as she imbibed at the University of Chicago and while working for the Economist.

Canada, Taiwan and Cuba, too. And for senior citizens in the U.S. And for veterans.

I’m not actually going to read McArdle on this, but if she’s saying that the whole house of cards falls apart if the U.S. stops subsidizing everybody else, well heck, most folks would reckon that’s an argument for national healthcare in one form or another.

politicalfootball, the usual right-wing argument along that line is that our (sorta) free market healthcare system subsidized R&D and innovation for all of the world, and therefore we have a duty to continue. This, of course, from people who aren’t in favor of subsidies in general.

Is the Army not a branch of the government? What makes it a fable? Did it not really happen?

To be clear, it is a fable that Walter Reed reflects on the VA system in any way.

The Army wasn’t created for the purpose of providing healthcare, and has some obvious shortcomings in that regard compared to other government-sourced providers, but no libertarian I’ve heard of has proposed that the Army should stop providing healthcare to soldiers, so they have to pretend that Walter Reed is a VA facility. That’s the fable part.

It works compared to what? Medicare costs far more than European health care. Medicare for all really isn’t a winning liberal argument.

Further the trend with Medicare enrolles is towards private health insurance. Medicare participants are opting out of basic Medicare and into private health insurance. So we want to apply to all what more and more Medicare enrolles are attempting to opt out of?

Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

“That’s a libertarian fable. Walter Reed is an Army facility, not a VA one, and is perhaps a useful example of how socialized medicine doesn’t work when the Army runs it.”

The dishonesty of this particular talking point runs deeper than that. The Walter Reed scandal had nothing to do with conditions at the hospital. It was about the housing complex where the long-term outpatients were living.

My daughter was born at Walter Reed. It was a modern hospital indistinguishable from the civilian hopital where my son was born two years later.

Without the US price feedback would no longer exist and your ideal wouldn’t work here or in Europe anymore

So wait. If it wasn’t for the American right, not only would we Euroweenies be speaking German but our public health care systems wouldn’t work. And those pesky liberals want to ruin it all for everybody. Damn.

Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

IOW, Medicare is already dependent on the private sector for price feedback; Medicare without the price feedback would be more expensive, because it would turn it into a frictionless socialised money pit.

Medicare costs far more than European health care.

IOW, Medicare is already more costly than the frictionless socialised money pits which actually already exist in the real world – and making it more like those systems would make it even more costly because, um.

It works compared to what it replaced. That’s why it exists, and why nobody in politics is proposing its repeal.

I’m familiar with the libertarian practice of comparing real things to things that don’t exist anywhere, but I’m amused to see someone suggest that Big Government should be shrunk because it fails to meet the standards of Big Government elsewhere.

I say, let’s pull our heads out of our asses and make our government work as well as theirs does.

So we want to apply to all what more and more Medicare enrolles are attempting to opt out of?

Medicare enrollees are, pretty much by definition, not trying to opt out of Medicare. But yes, I’m certainly in favor of a public healthcare system that everyone can opt out of if they choose. No other kind is being discussed.

Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

But what innovation are insurance companies creating? And anyway, where is that proposal to eliminate insurance companies? As you point out, even Medicare allows for the continued existence of insurers. And private insurers continue to do business in Europe, too. So, of course, do actual medical innovators.

The problem with following libertarians down the rabbit-hole is we end up discussing systems that don’t exist and/or aren’t being proposed.

Further the trend with Medicare enrolles is towards private health insurance. Medicare participants are opting out of basic Medicare and into private health insurance. So we want to apply to all what more and more Medicare enrolles are attempting to opt out of?

This of course would have nothing to do with the generous subsidies private Medicare insurers receive to allow them to compete on a (cough) “level” playing field with the public plan.

Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

The actual process of medical innovation is merely one of many subjects in which Megan McArdle flaunts her appalling ignorance.

Holbo, I think you’re right, McArdle doesn’t have a real argument. Almost ANY downside to U.S. public medical insurance is ALREADY inherent in private insurance.

Commenters here way above have noted that arguments defending the private system, whether based on economic efficiency or the liberty argument, are already compromised: because the system presently is rationing, and because the system presently is denying coverage by faceless corporate bureaucrats using fine print.

The “slippery slope” argument applies to the private system too: if it is not drastically altered, the long-term budget curve suggests that everybody is going to go bankrupt.

Slippery slope applies to anything with a slope, that could be slippery. Come to think of it, since the long-term budget deficit graph goes UP, slippery slope would keep bringing you back down again!

Libertarians in general it seems are not systems thinkers –they get ecology and climate wrong too– and their chosen tools of thought, i.e. static economic efficiency, and/or choice-liberty, (as opposed to, say, time-liberty, or bullshit-liberty) do not help them in these arguments. So they argue first one way and then the other, trying a sort of pincers maneuver that never closes the deal.

Here in medicine, the biggest cost savings to be had is in transaction costs, such as: the time and energy costs of finding and understanding medical insurance … the costs of keeping up with changes and reading the fine print … the cost of your doctor dealing with the insurance company … the costs of arguing and worrying when coverage is denied … the costs of waiting and worrying if you don’t have any medical insurance … the agency costs of the private insurance, which after management, payrolls and profit adds 20% or more to the bill … and even the costs of bailing-out the financial industry, since the insurance industry along with all the players were up to their fat waists in mortgage derivatives. These are all current transaction costs of the system of privately paying for medical insurance.

Libertarians want you to waste your time, dealing with this shit. They want choice-liberty, not bullshit-liberty. Sometimes choice-liberty is good, like if you’re buying consumer electronics or renting the DVDs.

Reducing transaction costs is the function of an institution, and if this isn’t being done, that means we need a new one. It may be partly market-based; that is immaterial to the main argument. If parts of it can be re-privatized in the future after incentives have been realigned, so be it. But right now, PEOPLE IF THEY WANT IT SHOULD BE ABLE TO CHOOSE A PUBLIC OPTION OF UNIVERSAL COVERAGE. Right now, it will increase productivity by saving personal time and energy (and not least among marginal workers.) It will reduce the long-term budget deficit, because part of your old private insurance can be used for the new system, while part of that money can stay in your pocket, and the savings appear to be massive in the long term.

You did not describe how you evaluate or compare the efficiency of Medicare to the private market’s delivery of health insurance for old poor people, nor that of any similar govt program for which private analogues exist. The concept of efficiency is central to your argument, but you have given it no substance.

If we are to come with good faith to your argument, we first need to know what you are talking about. Sorry for not being impressed because you used the word “efficiency”.

someguy @95: Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

Even if that argument was sound (hint: it isn’t), it would still only be a valid argument against socialized health care if you believed that maintaining the rate of innovation was more important than providing good health care to everyone. Or to put it another way, if you were a raving right-wing nutbar.

OK, I am waving my hand in the air to announce that I recognize no. 99 as a quote from a book that I didn’t think anyone read any more, The Thirteen Clocks by James Thurber. But then I have to admit that I don’t get it.

That is about 36 million. Actaully more like only 30 million. 45% of 16% of 12 trillion is 864 minus 400 billion for Medicare is 464 / 36 or about 13K per public health care enrolle under 65. [And those number were extremely generous based on what I looked up. ]

True the public system probably takes a disporptionate share of expensive patients. But I just don’t see how you get down to 4,500.

Public health care in the US is much more expensive then public health care in Europe switching to a public health care system will not give us European levels of health care spending.

You know, even when you repeat this:Public health care is the US is far more expensive then public health care in Europe. Creating a universal public health care system in the US is not going to give us the same results as Europe.
twice, The second part does not follow from the first.

It does mean that it is worth looking at why public health spending in the US is seemingly less efficient than in Europe, though.

“That could be written more clearly but what they are saying is that Medicare pays HMOs 10 percent more than they would pay for an enrollee in traditional Medicare but the HMOs offer the enrollee 13 percent more worth of extra benefits and rebates. In other words, the HMOs pass on to the enrollee all of Medicare’s “extra payments” plus some. (Note that this is exactly what one would expect in a competitive market.)”

The suprising thing is that more people haven’t already taken the plan with 13% more in benefits. But give it time.

A factor ignored in most of the health-care debate is the continuing decline in emergency/critical care in the US. Emergency rooms are used as drop-in clinics by the uninsured. Critical care and class 1 trauma units almost always operate at a loss. The financial strain of these services has resulted in many hospitals, particularly smaller, rural hospitals eliminating or downgrading them. So, even if you have gold-plated insurance, critical care may not be available in your community any longer. I know medical professionals who work in one of the best trauma units in the US. Interestingly, many of them could make much, much more money in a private practice (their facility is a county hospital affiliated with the University of Washington) but prefer to work where they can do medicine rather than run a business. Having just had surgery at this hospital I am grateful for its existence. I’d like to see this level of care continue to exist. The status quo is working against good care no matter whether you have insurance or not.

roac @ 106 – I could have said “I’ve just made a contribution to this thread, but I used one of the seemingly ever-expanding list of Banned Words so it got stuck in moderation again dammit”. But for some reason the Thurber quote seemed more apt. (It was late.)

What I wrote was, roughly,

someguy @95:

Megan’s argument is that without even the rough feedback from the US private market resources will be misallocated and innovation will slow.

IOW, Medicare is already dependent on the private sector for price feedback; Medicare without the price feedback would be more costly, because it would turn into a frictionless sozialised money pit.

Medicare costs far more than European health care.

IOW, Medicare is already more costly than the frictionless sozialised money pits which actually already exist in the real world – and making it more like those systems would make it even more costly because, um.

because public health spending in the US is, to a first approximation, Medicare, which is a program for old people.

But the point stays that the US already spends an entire Europe-level budget on the elderly, and that spending even zero on everyone else still wouldn’t make the system cheap.

There appear to be a lot of voters who think that any change in the healthcare system will eventually lead to cuts in Medicare, and not entirely without reason. For all their benefits, other health systems pretty much all do seem to spend less on elderly, terminally ill people. Anyone wanting to make America health care cheaper will have to look that way at some time

Hmm. Take the 2003 prescription drugs bill for example, where Medicare is specifically and conspicuously banned from negotiating the prices. If you want to design a government program to funnel tax money to corporations (for a kickback, see Billy Tauzin), it’s certainly a possibility.

It’s true, the argument about all these great government-run programs existing elsewhere is predicated on the assumption of a reasonably honest and competent government, and in case of the US of A it’s certainly a weak one.

A bit off topic, but I’m rather jealous of the Right at the moment. The last administration barely bothered to show up anywhere to even insult its critics as rabble in any sort of public discussion about anything, let alone face the public and get opinions shouted at them.

Pardon the interruption here but I thought you would all like to know: a seminal paper on the economic rationale for national social insurance schemes for healthcare costs is now available online with kind permission of the American Economic Association:

I’d think there’d be a lot of 113 before we get to the issue of 112. That said, better healthcare for the non-elderly will increase chances to become elderly so 112 will eventually bite — and with a vengeance, for those that said all issues would be solved if only they ‘got with the plan’.

It’s true, the argument about all these great government-run programs existing elsewhere is predicated on the assumption of a reasonably honest and competent government, and in case of the US of A it’s certainly a weak one.

Is the New Labour government really better in either respect? Yet the NHS is still there.

Where our massive corruption level kills us is in getting there in the first place. If (in Fantasyland, of course) we could once get a reasonable system established, career Federal employees would run it perfectly well. (Until the next Republican administration anyway…)

(I grew up in a household where the New Yorker was Mount Olympus and Thurber was the chief of the gods, and I read The Thirteen Clocks over and over. Since when I have gone more than 40 years without reading it; but it took me about two blinks to identify that quote. The machinery having started, I could now sit here and fill pages with lines from the book. Long-term memory is an interesting thing.)

The initial point of my posts was that to a libertarian government systems are inefficient. Even if they do not start out inefficient, they become inefficient over time as the bureaucracy ages and as market conditions (i.e., preferences) change. When I refer to efficiency, I mean efficiency in allocating societal resources to their most beneficial use – we get the wrong quantities of, wrong distributions of, and wrong investments in goods when the government is the primary allocator of resources. I am not trying to convince you that the private sector is more efficient than government. I am saying telling a libertarian to assume that the government plan will work the way it is intended to work is like me telling you to “assume that deregulation will work the way it is intended. . . Would the plan to deregulate work?”

What’s more (I did not mention this in my prior comments), is that by allowing the government to take a central role in non-Medicare health insurance markets, it makes it easier to gradually expand that role. Once a system for government intervention is established, it is easy to enlarge it and difficult to get rid of it. You would get more support if you went about universal coverage in a different manner.

@124 Is the New Labour government really better in either respect? Yet the NHS is still there.

I think the New Labour government really is better. I’m not talking about literal criminal corruption, but about the political system in general. Do you think any UK government would be able to pass an equivalent of the Medicare prescription drugs law with its ban on negotiating the prices? I doubt it. Yes, Billy Tauzin, the mastermind, took a multi-million dollar bribe (and a perfectly legal one), but also a majority of representatives and senators voted for it and the president signed it.

Also consider the social security situation: they raised highly regressive SS tax in the 80s (doubled it?), used the surplus to cut the progressive income tax, now they’re refusing to pay the IOUs, and they will probably get away with it too. Could any British government pull something like this?

It’s possible that the political system is simply unable to produce and sustain anything that would directly benefit the population. In which case the whole discussion is moot. End of story.

I am not trying to convince you that the private sector is more efficient than government.

Well, why the heck not? Which things are more efficient than which other things is just as much a question of fact as which things are heavier than which other things. Nobody suggests that weight is a matter of ineffable philosophy and differences of opinion shouldn’t be resolved by observation and argument.

It’s possible that the political system is simply unable to produce and sustain anything that would directly benefit the population. In which case the whole discussion is moot.

Well, if that’s the case, then it’s time to get REALLY radical, like the fellow who wrote this:

whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.